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    Demand function

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    The following demand function demand function has been estimated for Fantasy pinball machines:

    QD = 3,500 - 40P + 17.5Px + 670U + .0090A + 6,500N
    where P = monthly rental price of Fantasy pinball machines
    Px = monthly rental price of Old Chicago pinball machines (their largest competitor)
    U = current unemployment rate in the 10 largest metropolitan areas
    A = advertising expenditures for Fantasy pinball machines
    N = fraction of the U.S. population between ages 10 and 30

    Based on the information presented in above, what is the point cross elasticity of demand for Fantasy pinball machines with respect to Old Chicago pinball machines when P = $150, Px = $100, U = .12, A = $200,000 and N = .35?

    a -0.514

    b 1.028

    c 0.514

    d .257

    © BrainMass Inc. brainmass.com October 9, 2019, 5:49 pm ad1c9bdddf
    https://brainmass.com/economics/unemployment/demand-function-69323

    Solution Preview

    The following demand function has been estimated for Fantasy pinball machines:

    QD = 3,500 - 40P + 17.5Px + 670U + .0090A + 6,500N
    where P = monthly rental price of Fantasy pinball machines
    Px = monthly rental price of Old Chicago pinball machines (their largest competitor)
    U = current ...

    Solution Summary

    Answers a multiple choice question on demand function.

    $2.19